Half Year Results for Period Ended 30 June 2020 |

Impact Healthcare REIT plc (ticker: IHR), the real estate investment trust which gives investors exposure to a diversified portfolio of UK healthcare real estate assets, in particular care homes, today announces its half year results for the six months ended 30 June 2020 and its Q2 2020 dividend.

Please see the attached document for the full RNS release.

Rupert Barclay, Chairman of Impact Healthcare REIT PLC, commented:

“The Group works closely with all its tenants as they continue to provide an essential service to the communities in which they operate. We remain a long-term business and the Company’s healthcare portfolio continues to provide crucial social care infrastructure supporting vulnerable elderly people across the UK. We are confident that, despite the short-term uncertainty produced by the pandemic, the fundamental drivers of our industry and business remain strong.

The Company’s business model remains robust and resilient as demonstrated by the Group’s 100% collection of rent due for the year to date and we continue to be well positioned for the short and longer term. We remain well capitalised, with a strong balance sheet and have significant liquidity and headroom, which together leave us well placed to continue to deliver value responsibly for all our stakeholders: our tenants, residents in the care homes we own, our tenants’ care professionals and our shareholders.”

Operational highlights

• 100% collection of rent due for the year to date, underlining the resilience of the Group’s defensive business model.
• In the period to 30 June 2020, we acquired eight properties with 545 beds, committed to forward fund a further property with 94 beds and exchanged on a further nine properties with 649 beds. On completion this will bring our total properties to 104 with 5,601 beds.
• Adding one new tenant increasing the total number of tenants to 104 in the period and exchanged contracts with leases to a further new tenant, our 11th 4. All leases continue to be inflation-linked with upwards only rent reviews.
• Weighted average unexpired lease term (“WAULT”) of 19.5 years at 30 June 2020 (30 June 2019: 19.6 years).
• Rent reviews for the period ended 30 June added £0.46 million to contracted rent, representing a 2.0% increase on the associated portfolio.
• Grew the contracted rent roll by 36.6% to £29.5 million (30 June 2019: £21.6 million).
• £50m RCF secured with HSBC on 6 April 2020.

COVID-19

As levels of uncertainty created by the pandemic peaked at the beginning of the second quarter, we knew we had built in a number of buffers from earlier strategic decisions that had been taken. These included:

• a focus on careful tenant selection;
• negotiating lease terms which are sustainable as they were based on solid levels of initial rent cover; and
• maintaining a conservative balance sheet with modest levels of debt.

We also knew that our tenants provide an essential service, demand for which is not directly correlated with the strength or weakness of the economy.

The key tests were whether our tenants were able to continue to provide good quality care during an exceptionally challenging period; and whether we continued to collect 100% of the rent due, without putting undue stress on our tenants. There may be a second wave, or other challenges which lie ahead, but we are confident that lessons have been learned and pleased with how well the Group and its tenants rose to these two tests.

Post balance sheet highlights

• As a result of the Group’s uninterrupted collection of advance rent due for the year to date, the Board today declared the Company’s second-quarter interim dividend of 1.5725 pence per share, for the period from 1 April 2020 to 30 June 2020. This is in line with the aggregate total dividend target of 6.29 pence per share3 for the year ending 31 December 2020, which was reaffirmed by the Board on 10 July 2020.
• Following the acquisition of Red Hill in January 2020, Minster transferred residents and staff to this home from The Shrubbery, a 36-bed home nearby. The Shrubbery has now been sold at a 24% uplift to its carrying value.

Appointment of Joint Corporate Broker

The Company is pleased to announce the appointment of RBC Capital Markets as its Joint Corporate Broker alongside Winterflood Securities Limited with immediate effect.

Results presentation

The Company presentation for investors and analysts will take place via a webcast and conference call at 9.30am today.

For those who wish to access the live webcast, please register here: https://www.investis-live.com/impact-reit/5f1fe575a6d0961200125f51/sfse

For those who wish to access the live conference call, please contact Maitland/AMO at impacthealth-maitland@maitland.co.uk or by telephone on +44 (0) 20 7379 5151.

The recording of the webcast/conference call will also be made available later in the day via the Company website: https://www.impactreit.uk/investors/reporting-centre/presentations/

Notes

1    Adjusted earnings per share reflects underlying cash earnings per share in the period. The adjustments made to EPS in arriving at EPRA and Adjusted EPS are set out in note 7 of the Interim Financial Statements.

2    As at 30 June 2020, 28 June 2019 and 31 December 2019 respectively.

3    This is a target only and not a profit forecast. There can be no assurance that the target will be met and it should not be taken as an indicator of the Company’s expected or actual results.

4    Including Minster and Croftwood which are both part of the Minster Care Group.

For further information please contact:

Impact Health Partners LLP via Maitland/AMO
Mahesh Patel
Andrew Cowley

Winterflood Securities Limited
Joe Winkley
Neil Langford
Tel: 020 3100 0000

RBC Capital Markets
Rupert Walford
Matthew Coakes
Tel: 020 7653 4000

Maitland/AMO (Communications Adviser)
James Benjamin
Tel: 020 7379 5151
Email: impacthealth-maitland@maitland.co.uk

The Company’s LEI is 213800AX3FHPMJL4IJ53.

Further information on Impact Healthcare REIT is available at www.impactreit.uk.

NOTES:

Impact Healthcare REIT plc is a real estate investment trust (“REIT”) which aims to provide shareholders with an attractive return, principally in the form of quarterly income distributions and with the potential for capital and income growth, through exposure to a diversified portfolio of UK healthcare real estate opportunities, in particular care homes for the elderly. The Group’s investment policy is to acquire, renovate, extend and redevelop high quality healthcare real estate assets in the UK and lease those assets primarily to healthcare operators providing residential healthcare services under full repairing and insuring leases.

The Company has a progressive dividend policy with a target to grow its annual aggregate dividend in line with the inflation-linked rental uplifts received by the Group under the terms of the rent review provisions contained in the Group’s leases in the prior financial year.

The Group’s Ordinary Shares were admitted to trading on the main market of the London Stock Exchange, premium segment, on 8 February 2019. The Company is a constituent of the FTSE EPRA/NAREIT index.